Maryland PSC Debates Whether Click-Through Ads to Retail Suppliers Constitute Brokering and Require License

The Maryland PSC yesterday considered whether the offering of click-through online advertisements for retail suppliers, with compensation based on the number of click-throughs, constitutes electric brokering and requires a license.

The issue arose in consideration of the license application of Power Target, LLC for an electric broker license, which was ultimately granted (see related story today).

During the pendency of its application, Power Target, LLC's website had allowed Maryland customers in certain service areas (such as BGE) to enter their zip code, which then resulted in a list of certain retail suppliers. No specific rate or offer information from the suppliers was listed on the Power Target website.

If a customer clicked on one of the suppliers, the customer was linked, through a new window, to the supplier's website where specific rate information was available and to enroll. The customer had to enter their information again on the supplier's site if clicking through. No enrollment occurred on the Power Target website.

Power Target was compensated by the suppliers for clicks through to each supplier's site. Power Target was not compensated based on actual enrollments of customers with the suppliers. Power Target had consulted with counsel concerning the list of suppliers and believed that the list did not constitute brokering under the statutory definition.

The Maryland Office of People's Counsel argued, however, that Power Target's site as previously constituted amounted to electricity brokering, since,
"[a]pplicant's site is explicitly designed to attract and inform those users interested in purchasing electricity from a third-party supplier." OPC had suggested that the PSC fine Power Target for operating as a broker without a license.

Power Target did remove the Maryland information from its site upon being informed of OPC's position.

Although Power Target was not compensated per customer, Commissioner Kelly Speakes-Backman considered the click-through agreement to constitute a "commercial relationship," and noted that Power Target was directing traffic to an entity with which it had a commercial relationship.

"To have a commercial relationship with a specific supplier as a broker without having a license is not OK," Speakes-Backman said, speaking for herself. Speakes-Backman stressed that because Power Target was working with specific suppliers, "that's sort of jumping the gun in my eyes."

However, the Commission did not definitively address the question of whether Power Target's prior operations constituted brokering under the Maryland statute.

The PSC did not adopt OPC's recommendation for a fine; however, the Commission did not opine on whether this was because it did not agree that Power Target's prior operations constituted brokering, or because it believed such operations did, in fact, amount to brokering but decided other mitigating factors did not warrant a fine (such as an honest difference in statutory interpretation, immediate correction of the problem, etc.).

With the granted license, Power Target will offer a comparison shopping engine and will list specific offers on its site.